Seventh Circuit Holds Individuals Personally Liable for the Corporation?ÇÖs Withdrawal Liability from a Multiemployer Pension Plan

Messina Trucking withdrew from a multiemployer pension plan after the collective bargaining agreement ceased.?á The pension plan filed suit for collection of withdrawal liability against, among others, Messina Trucking?ÇÖs owners, Mr. and Mrs. Messina, and other businesses owned by the Messinas.?á While passive investors are not trades or businesses for these liability purposes, the Seventh Circuit Court of Appeals, citing a prior opinion, held that renting property to a withdrawing employer is ?Ç£categorically?Ç¥ a trade or business.?á It was undisputed that the Messinas rented property to their closely-held corporation; therefore, the Messinas were personally liable to the pension plan for the company?ÇÖs withdrawal liability. The Court also held another entity owned by the Messinas was a trade or business even though it had no employees, regular business activity, real estate, or other assets, aside from an investment in another entity.?á The court concluded that this entity was a trade or business because it was formed, according to its operating agreement, to develop properties and to produce, market, and sell gravel.?á Had the company amended its operating agreement to reflect that the company was operating merely as a passive investment vehicle, the court stated it may have reached a different conclusion.?á Central States Southeast & Southwest Areas Pension Fund v. Messina Products, LLC, Nos. 11-3513 & 12-1333 (7th Cir. Feb. 8, 2013).